RBS reduces bad loans provision

Stronger economic conditions are boosting the recovery at Royal Bank of Scotland after it cut the amount of money it is setting aside to cover bad loans.

The taxpayer-backed bank issued an unscheduled trading update today in which it said it expects to significantly beat its previous guidance for around £1bn of loan impairments in the current financial year.

This has been driven by improved performances at Ulster Bank and RBS Capital Resolution, which contains the bank’s troublesome assets.

However, the bank warned it still faced many bumps on the road to recovery, particularly relating to conduct and litigation matters.

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